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Strength in diversity? Fiscal federalism among the fifty US states

Author

Listed:
  • Teresa Garcia-Milà

    (Universitat Pompeu Fabra)

  • Therese J. McGuire

    () (Northwestern University)

  • Wallace E. Oates

    (University of Maryland)

Abstract

Abstract Fiscal federalism in the USA has a distinctive structure that contrasts sharply with that in most other industrialized nations. Our purpose in this paper is to describe and explore the US “brand” of fiscal federalism. We demonstrate that there is a striking amount of variety in the 50 state fiscal systems and that these differences have prevailed in the face of potentially disruptive forces. The variety we find stems in large part from states having meaningful fiscal autonomy, in particular, the authority to levy taxes. The result is likely higher societal welfare than would ensue without this autonomy.

Suggested Citation

  • Teresa Garcia-Milà & Therese J. McGuire & Wallace E. Oates, 2018. "Strength in diversity? Fiscal federalism among the fifty US states," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 1071-1091, August.
  • Handle: RePEc:kap:itaxpf:v:25:y:2018:i:4:d:10.1007_s10797-018-9485-4
    DOI: 10.1007/s10797-018-9485-4
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    References listed on IDEAS

    as
    1. John Joseph Wallis, 2000. "American Government Finance in the Long Run: 1790 to 1990," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 61-82, Winter.
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    More about this item

    Keywords

    Fiscal federalism; 50 US states; Subnational fiscal autonomy;

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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